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DETROIT (WWJ/AP) – A Michigan development agency has awarded incentives to further work on Detroit’s light-rail project and tear down Joe Louis A — current home of the Red Wings.

The Michigan Economic Development Corp. announced the grants and loans Tuesday to develop the M-1 Rail project and demolish The Joe.

A new arena could be built by the same year that would replace Joe Louis as a hockey and entertainment venue. The City Council has approved the transfer of land just north of downtown and financing for a new facility.

A total of $6 million was awarded for demolition.

What will happen at the old Joe Louis site?

“We’re going to be guided by what the city wants,” said Strategic Fund Chairman Mike Finney. “It is a city property. It has great redevelopment potential. Obviously we want to see private sector development there; I think it makes sense for private sector development.”

The rail project was awarded a $10 million performance-based loan and the arena demolition will get $6 million in economic assistance.

The 3.1-mile streetcar line is to start running along Woodward Avenue, from Jefferson Avenue to just north of Grand Boulevard, in 2016. The project, which also received $25 million in federal aid, is expected to cost $140 million.

Finney says the project is worlds apart from the often-panned Detroit People Mover.

“While the People Mover certainly had its issues over the years, this is a very different approach, and it’s along the major thoroughfare in the city of Detroit,” he said. “And if you just look at what’s happening right now along the Woodward corridor without a lite rail system, the development is pretty fantastic.”

“What you see if a very big commitment from the community,” Finney added. “It’s a public-private partnership, the resources that are being committed are phenomenal, and we think it’s important to be a part of that.”

Construction on the M1 Rail line is expected to begin as early as sometimes this spring. The streetcar will run every seven minutes along Woodward Avenue from Jefferson Avenue to just north of Grand Boulevard.